Michael R. Akselrad
In the modern world, billions of people share personal information online every day, ranging from consumer preferences to biometric and genetic identifiers, leading to the commoditization of user data, the value of which may dwarf the other assets of even large, multinational corporations. In the ordinary course of business, this user data may be kept confidential through such measures as privacy policies, statutory protections, and the reputational backlash facing a company that acts too brazenly with users’ sensitive information. In bankruptcy, however, some of these safeguards are eliminated in the interest of maximizing the value of the estate, providing an avenue for corporations and investors to monetize personal data that would be inaccessible in the landscape of solvent corporate operations. Though the bankruptcy arena features its own protections for consumers, including an amendment to the Bankruptcy Code aimed at protecting “personally identifiable information,” it remains to be seen how this will apply to the novel issue of immensely personal data in which technology and social media companies traffic. As we begin to see the first failures of such companies, which mine data of a sort and scale not contemplated in the recent amendments to the Bankruptcy Code, it appears that inadequate protections in the Code pose a unique threat to user data and consumer privacy. With several social media giants having teetered on the edge of bankruptcy in recent years and fewer barriers than ever standing between our most intimate information and the highest bidder, it is necessary to explore the myriad avenues for necessary and meaningful reform available to legislators and regulators on both the state and federal level.